Congratulations on your new home! The first year of homeownership can be an exciting, yet overwhelming, experience. You're now responsible for a lot of things that were once handled by a landlord, and there’s a lot to learn. But don’t worry—this guide will help you navigate the challenges of your first year and get your footing as a homeowner.
My Best Piece of Advice for Those Transitioning into Homeownership is….
Don’t rush to make big changes. It’s tempting to want to renovate every room or tackle all of those “dream projects” right away. However, it’s important to live in your home for a while before making big decisions. Give yourself time to adjust and learn how you use the space. The one project that I do advise my clients to do prior to moving in is sanding and staining hardwood flooring if that is something you do want to do in the near future. Between the dust and moving furniture, it makes more sense to do before occupying the house.
Here are Some Must-Dos in the First Year of Homeownership:
1. Understand Your Home's Systems
Familiarize yourself with the major systems of your home—air conditioning, heating system, plumbing, water heater, electrical, and roofing. Know where the shutoff valves are and how to turn off your water, gas, and electricity in case of an emergency. If you are unsure, consider hiring your inspector to come back or another professional to walk you through the basics.
2. Set a Maintenance Schedule
Home maintenance is ongoing, so setting a schedule is essential. Tasks like changing HVAC filters, cleaning gutters, checking for leaks, pest control and servicing appliances should be done regularly. Reach out to your real estate agent or home inspector for recommendations on local maintenance service providers. Create a calendar or checklist so nothing slips through the cracks.
3. Establish an Emergency Fund for Repairs
Set aside money each month for home repairs and emergencies. A good rule of thumb is to save 1% of your home's value per year for maintenance. For example, if your home is worth $500,000, aim to set aside $5,000 annually for repairs and upkeep.
4. Get to Know Your Neighbors and Neighborhood
Introduce yourself to neighbors, join community groups, check out your city/town’s website and online chat groups, subscribe to your city/town’s newsletter and get familiar with local resources. Understanding the area will help you feel more settled and may even provide valuable tips on local contractors and service providers.
Here are the Biggest Mistakes I See First-Time Homeowners Make:
1. Ignoring Maintenance Needs
Maintenance costs aren’t optional—they’re essential. It’s easy to forget about minor repairs or postpone them, but ignoring small issues often leads to larger, more expensive problems down the line. For example, neglecting roof maintenance could eventually lead to a leaking roof, causing expensive water damage.
2. Overextending Financially
Many first-time homeowners stretch their budgets to buy a home that’s larger or more expensive than they can comfortably afford. It’s important to balance your mortgage with other homeownership costs (e.g., taxes, insurance, utilities and repairs). Be realistic about what you can handle financially.
3. Thinking About Skipping a Home Inspection
Today, a lot of buyers are being asked to some aspects of the inspection contingency. Your real estate agent and real estate attorney should guide you on this during your purchase. However, even if you are waiving any aspects of the home inspection contingency, you should still have an inspection on the entire house! Do not skip this crucial step of the purchase process to save a little money. This is a huge mistake. A professional inspection can uncover hidden issues with the property—saving you thousands of dollars in the long run.
Here are some Financial Tips for New Homeowners:
Set Up an Emergency Fund for Your Home
In addition to your general emergency fund (which should cover three to six months of living expenses), it’s smart to have a separate emergency fund specifically for home repairs and maintenance. This will help you avoid scrambling for funds when unexpected expenses pop up.
1. Consider Refinancing Your Mortgage (If Applicable)
Interest rates fluctuate, and you might be able to refinance your mortgage to a lower rate after you’ve built some equity. Refinancing can lower your monthly payment or shorten the term of your loan, potentially saving you money in the long run. Just be sure to calculate closing costs and fees before making this decision.
2. Make Extra Mortgage Payments
If you’re able, making additional payments toward your mortgage principal can reduce the overall interest you will pay over the life of the loan. Even paying an extra $100-200 each month can make a significant impact in the long term. You can also consider biweekly payments, which essentially add one extra payment per year.
3. Take Advantage of Tax Deductions
Homeowners are eligible for several tax deductions, including mortgage interest and property tax deductions. Make sure to consult with a tax professional to ensure you are maximizing any savings available to you.
4. DIY Small Repairs
Not all repairs need to be handled by professionals. Learn basic DIY skills, like painting, caulking windows, or fixing minor plumbing issues. Not only will this save you money, but it’ll also give you a sense of accomplishment and control over your home.
5. Shop Around for Homeowners Insurance
Don’t settle for the first homeowner’s insurance quote you receive. Shop around and compare policies to make sure you’re getting the best coverage for your home at the best price. Consider bundling home and auto insurance for discounts.
The first year of homeownership is full of learning experiences. While there will be challenges along the way, it’s also a time of pride and growth as you make your house a home. By staying on top of maintenance, budgeting carefully, and planning for the unexpected, you’ll be well on your way to enjoying the long-term benefits of homeownership.
Good luck, and enjoy your new space!
Miriam Lambert
Broker-Associate
Christie’s International Real Estate Group